Gladstone Commercial (NASDAQ:GOOD) and Net Lease Office Properties (NYSE:NLOP) Critical Survey
by Mitch Edgeman · The Markets DailyNet Lease Office Properties (NYSE:NLOP – Get Free Report) and Gladstone Commercial (NASDAQ:GOOD – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Earnings and Valuation
This table compares Net Lease Office Properties and Gladstone Commercial”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Net Lease Office Properties | $142.25 million | 3.07 | -$91.47 million | ($12.22) | -2.41 |
| Gladstone Commercial | $155.25 million | 3.45 | $24.00 million | $0.18 | 61.50 |
Gladstone Commercial has higher revenue and earnings than Net Lease Office Properties. Net Lease Office Properties is trading at a lower price-to-earnings ratio than Gladstone Commercial, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings for Net Lease Office Properties and Gladstone Commercial, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Net Lease Office Properties | 1 | 0 | 1 | 0 | 2.00 |
| Gladstone Commercial | 1 | 2 | 0 | 0 | 1.67 |
Net Lease Office Properties currently has a consensus price target of $46.00, indicating a potential upside of 55.99%. Gladstone Commercial has a consensus price target of $12.00, indicating a potential upside of 8.40%. Given Net Lease Office Properties’ stronger consensus rating and higher probable upside, research analysts plainly believe Net Lease Office Properties is more favorable than Gladstone Commercial.
Institutional & Insider Ownership
58.3% of Net Lease Office Properties shares are owned by institutional investors. Comparatively, 45.5% of Gladstone Commercial shares are owned by institutional investors. 0.7% of Net Lease Office Properties shares are owned by insiders. Comparatively, 1.4% of Gladstone Commercial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Net Lease Office Properties and Gladstone Commercial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Net Lease Office Properties | -156.16% | -34.31% | -26.04% |
| Gladstone Commercial | 18.67% | 16.37% | 2.52% |
Risk and Volatility
Net Lease Office Properties has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Gladstone Commercial has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.
Summary
Gladstone Commercial beats Net Lease Office Properties on 10 of the 14 factors compared between the two stocks.
About Net Lease Office Properties
Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.
About Gladstone Commercial
Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.